Natura & Co Holding SA
BOVESPA:NTCO3

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Natura & Co Holding SA
BOVESPA:NTCO3
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Price: 14.28 BRL -0.28% Market Closed
Market Cap: 19.8B BRL
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Earnings Call Transcript

Earnings Call Transcript
2024-Q3

from 0
Operator

Good morning, ladies and gentlemen, and thank you very much for waiting. Welcome to our third quarter 2024 earnings call of Natura &Co. It is important to highlight the fact that we count on simultaneous translation resources. [Operator Instructions]

Today with us Fabio Barbosa, Global CEO for Natura &Co; Joao Paulo Ferreira, CEO; and Guilherme Castellan, our CFO. This presentation is available on our Investor Relations website.

I would like to pass the floor to Fabio Barbosa. You may now proceed.

F
Fabio Barbosa
executive

Good morning, and thank you very much for attending this conference. Starting our financial performance, I would like to highlight the fact that it was an excellent quarter. There was a continued acceleration in sales with an increase of 18.5% in constant currency, or 11%, excluding Argentina. This good movement in revenues combined mainly with operating leverage and the simplification of the operation allowed us to report a robust evolution on profitability. Profitability expanded by 340 bps and recurring to EBITDA more than 50%. Wave 2 evolving, delivering expected results, profitability and cash conversion and cash conversion. Joao Paulo will give you details about Wave 2.

This positive result will not yet be able to be seen on the last line. At this quarter, we are already de-consolidating the results of API subsidiaries from the results due to the Chapter 11 announced in August. As a result, non-cash, nonrecurring loss, BRL 7 billion, was recorded in discontinued operations that ended up neutralizing the positive net income, BRL 302 million recorded with our continuing operations. Any loss you may have at the end of the final year will eventually be offset with capital reserves upon shareholder approval, enabling the company to pay dividends.

On ESG front, we're celebrating 10 years as a big corporation, which will provide and make progress on our climate transition plan. There is a line of innovation. We launched an unprecedented collaboration with Nestle, which is also a big operation to reuse the aluminum from Nespresso capsules.

I'll give the floor to Joao Paulo and Guilherme to submit the results, and we will return to you during the Q&A.

J
JoĂŁo Paulo Brotto Ferreira
executive

Thank you, Fabio. Good morning. This is Joao Paulo. I'd like to say that we now with 1.5 years since the first implementation. Now I'd like to give you a very brief update about Wave 2 and the results so far.

When we thought of Wave 2, our main goal was to improve profitability and reduce the profitability gap, the EBITDA margin between Avon and Natura Latin America. At that point in time, when we were jacking this recurring EBITDA margin with the 2 brands, there was a gap, about 20% between them. Avon operated with unsustainable margin, and there was cash burn. And the leverage of this initiative, Wave 2, were basically the combination of channels focused on productivity, optimization of our portfolio and the search for efficiencies for both admin, back office, this is in the marketing process. The combined operations throughout this 1.5 years among Peru, Colombia, Brazil, Chile were, as a matter of fact, the major leverage. These are 6 consecutive quarters of margin expansion since the beginning of implementation of Wave 2.

We started off from EBITDA with 13% margin in the second quarter, reaching 15.3% in this last quarter. And Wave 2, this is still one riding in Brazil. We've just completed our logistics integration that allows us to launch the integrated checkout. Now consultants, reps can buy both brands in a single order. In many regions, we receive them in a single delivery. We also started Wave 2 in Mexico. There is a number of initiatives taking place, and we will launch Wave 2 in Argentina very soon. In both cases, the process should be completed by 2025. Of course, we have not much time, but there will be a Q&A at the end of this presentation.

Now having said that, I would like to pass the floor to Guilherme and he will just make a comment about the quarter's numbers.

G
Guilherme Strano Castellan
executive

Good morning, folks. We are now showing you an 18% increase revenue in constant currency, with highlights being Natura's strong performance in Brazil, Avon's growth due to a weak year-ago comparison, Natura's acceleration across the rest of Latin America. Natura grew 19%, maintaining strong sales dynamics while benefiting from productivity and volume gains, especially after the implementation of the combined order. As Joao Paulo mentioned, other important factors were the improved service level and product innovations such as the Todo Dia hair care line, which has already benefited the quarter's results.

In the Hispanic region, Natura's accelerated performance in the high-single-digits, excluding Argentina, was driven by Wave 2 countries. In Mexico, despite platform changes in the region due to the Onda 2, Wave 2 rollout, revenues remained strong. Looking at the Avon brand in Brazil, the increase was 14%, starting from a weaker comparison base with skin care and makeup products leading the performance, along with productivity gains after the launch of the combined order. In the Hispanic region, Avon showed a 2.7% decline, excluding Argentina.

Despite ongoing channel reductions in the region, just like Joao Paulo showed, revenues have been recovering, benefiting from a weaker comparison basis as well. In the Home & Style segment, we also had a weaker comparison base, but it's worth mentioning that this is the third consecutive quarter where the category's sequential performance has been stable.

Slide 7, we can see the performance of our recurring EBITDA. This quarter, we had a solid gross margin expansion of 340 bps as a result of a series of factors such as operational leverage, improved price and promotion execution, a richer country mix, especially those that have already been with the Wave 2 implemented and an increased exposure of the Natura brand. Additionally, efficiencies in general and administrative expenses, logistics and credit and collection were reinvested in marketing and other strategic projects such as Rock in Rio and product launch campaigns, positively impacting sales.

We also had the effect of a reduction in corporate expenses, which fell 43% year-on-year. Our recurring EBITDA showed a margin expansion of 340 bps [Technical Difficulty]

On Slide 8, we show the effects of the de-consolidation of the API in our balance sheet this quarter. The non-cash, nonoperational impact on discontinued operations was BRL 7 billion, representing 3 effects. Number one, a positive impact of BRL 3.8 billion related to the de-consolidation of API's negative equity and impact from receivable from Natura &Co companies against API and its subsidiaries, which were previously treated as intercompany. In the context of Chapter 11, these receivables are no longer intercompany, and there's a write-off of BRL 10.7 billion of these receivables. And lastly, a negative impact of BRL 97 million related to the net loss of Avon International from July to mid-August as well as other effects such as tax and legal expenses. As Fabio mentioned, this loss may eventually be offset by capital reserves.

On the profits slide, you can see that the reported loss is mainly related to the impact of the de-consolidation of API just explained. The underlying net profit was positive at BRL 524 million. Aside from all operational points I've highlighted that led to BRL 320 million increase in EBIT, we had higher financial expenses due to the moving from a net cash position to a projected net debt position as well as higher tax expenses. The discontinued operations showed a cash flow of BRL 60 million from January to September, accounting for a significant improvement compared to the same period last year when we had a BRL 1.5 billion related to the liability management exercise carried out in Q3 '23.

The improvement was mainly explained by 3 reasons: Number one, improvement in working capital, mainly driven by this quarter due to the benefit of receivables and continued improvement in accounts payable; lower interest expenses due to lower leverage compared to the first 9 months of '23; finally, a reduction in CapEx benefited from the intangible investments allocated to operational lines. In this slide, you can see our level of indebtedness. We were very active trying to extend our debt, as we mentioned in the previous call back in August. We prepaid debt of BRL 1.3 billion that were due in '25 and '27, and we issued new debt issues of the same value during 2029. As a result, we ended the quarter with BRL 3.3 billion in cash, more than enough to cover maturing close obligations through 2027. The cash also had an impact from the de-consolidation of Avon with an effect of more than BRL 1 billion as shown in the company's cash flow. Our net debt-to-EBITDA ratio is 1.5x.

I'll now turn it back to Fabio for his closing remarks and next steps.

F
Fabio Barbosa
executive

In conclusion, I would like to reiterate a couple of things. Number one, the company's simplification process is progressing and remains the primary goal of management. Number two, Wave 2 has been implemented in most regions and should be completed by the end of 2025. We will continue using the lessons learned in '23 and '24 to minimize disruptions in the upcoming countries and gain productivity. Number three, our agenda. Our main strategic projects include a healthy and diversified channel, consumer-centered innovations and strong brands and admired by all stakeholders. Number four, finally, our commitment to the triple bottom line strategy remains strong to unlock value for shareholders in a sustainable fashion.

Thank you. Let's move on to the Q&A session now.

Operator

[Operator Instructions] The first question comes from [ George ] Giordano from JPMorgan.

J
Joseph Giordano
analyst

I have 2 questions actually. The first one has to do with operations and the recurring operations. looking at Wave 2, 2 things from operations, what remains to be delivered for these new operational models, the updates in Argentina and Mexico. And I understand what the relevance of the tax rate, especially when the credit you have to receive. On the other hand, the market has been wondering about the company's net debt well above what was previously expected. So I would like to understand whether these impairments could go back or could come back to Natura through the Chapter 11 process at Avon in 2025.

G
Guilherme Strano Castellan
executive

I would like to start answering this question on the financial aspect of it with regards to the leveraging. And then I'll move to the tax issue. And then I'll pass the mic to Joao to talk about Wave 2. Generally speaking, this quarter was a moment of API in this consolidation and the accounting consequences with the results of Avon with our API and the subsidiaries in our Natura balance sheet. And of course, that caused some noise in accounting terms. And in the net income impact, and we explained that just a couple of minutes ago during our presentation.

The other thing is the leverage impact, as you may notice. This can be reversed, but, of course, depending on the outcomes, the possible outcomes of this Chapter 11 process and development. So basically, the scenario that I would like you to observe is based on 2 factors. First, our strong cash in LATAM with our very good strong revenues and EBITDA and operations, principally with the strength of Natura brand with a double-digit growth in Natura Brazil. That basically offset by Avon and discontinued operations.

So basically, those operations in Avon as of the 1st of July to the 1st of August. And then we have the financial results of Avon with [ Intercon ]. And that is also between the 1st of July to the beginning of August. And then basically, the legal issues with the API that would go from June to August. In addition to that, there are some debts that are linked to those operations. Of course, that is with Avon and United States. And those debts were, of course, supposed to be set so that we can run that until the end of Chapter 11, which is a secured line of credit so that Avon may proceed with those operations.

This is with regards to the assets outside U.S. So that goes in the same line. So basically, all those impacts that I just listed plus the costs related to Chapter 11. So that means several of legal advisory costs. And this is all within the back of discontinued operations. And then in the end, when you're talking about the good results in LATAM with those remarks with regards to the cost generated in this quarter, the major lever of the increase of this net debt is the impact of this cash and the liability between Natura and Avon. This is the rationale of the increase of the net debt. But as you remarked quite well, in case our asset purchasing agreement is also activated, a major chunk would be reverted to the current value as Avon cash. And then, of course, it would have to match the potential of each of those aspects.

So now I would like to invite the market to think about this impact, major of -- the part of this BRL 1.3 million would be reverted in case the assets are acquired from Avon. And then the market should continue to analyze the operational aspect of the company that is very strong, gaining momentum. And you know that the last quarter of the year is always very strong with regards to cash generation, obviously, the most important quarter of the year to the company.

So with regards to the tributary aspects, we had already mentioned that there is the phaseout of expenses basically between second quarter, third quarter. So we always suggest you to analyze those issues from effect tax rate and cash tax rate, analyzing the last 12 months. So basically, what we have is expenditures from the holding that phase out, generating a benefit in Cascade and other fiscal benefits that we can enjoy positively during these last quarters in Latin America.

When you look at the future, we have to think about a basic rate just considering the markets where we operate, especially in -- we increasingly expect to have the strengthening of the deficitary markets. They will become stronger, and they will be net income countries. So there is a very good mix of countries with different rates. But we actually -- we are not giving guidance or we are not speculating. It's just something that is happening, and we had already mentioned that during the second quarter. So we really expect to have a very strong situation when we analyze in the middle run.

I would like to pass the floor to Joao now so he can just give and continue with my answer.

J
JoĂŁo Paulo Brotto Ferreira
executive

Well, as to Wave 2, Peru, Colombia, Chile, and Brazil, they all have concluded the integration phase. And now they're going through that continuous improvement phase. After 1.5 years, we've already provided alternatives of uses and different combinations of businesses, which yielded better results here and there. And now they are implementing these best practices to further explore cross-sell and upsell opportunities, but it's a continuous improvement process.

As to the other countries, despite their limited size, we've introduced the Natura brand in Ecuador on October 1. We may even call it Wave 3 using the cross-sell lessons from Wave 2 to introduce Natura brand elsewhere. The other 2 main countries that remain are Mexico and Argentina. We're now laying the groundwork using that experience we've acquired in other countries. Now we know we can remove all that noise with that preparation in advance. In Mexico, Natura's brand has been very successful, which is not the case for Avon. And we want to maintain the same stabilization we have in other countries after the stabilization. And in Argentina, both brands have had good performance. That combination will be great to offset the macroeconomic challenges the country is faced with. So this is the scenario for 2025.

Operator

The next question is Ruben Couto from Santander.

R
Ruben Couto
analyst

Can you give us an idea of the pace of the growth of the market based on the internal measurements that you are following? Is there any acceleration compared to the first semester of the year? So I would like you to talk a little bit about it. And another thing, you just showed the royalties with Avon. This is a fixed value. Is it based on the percentage, based on the sales? Can we just have an idea of what is going to happen in the future? Is there any chance of changing anything with the wrap-up of the Chapter 11 issue?

J
JoĂŁo Paulo Brotto Ferreira
executive

Ruben, this is Joao Paulo. Natura's results here, we have performance well above the market. Our market has grown at about 7%, 8%, 6% based on external analysis. So Natura's growth is an important share gain, not the quarter, but the accrued numbers explain that substantial growth.

F
Fabio Barbosa
executive

Let me add that, but this is the result of the investments we've made in marketing. And Joao Paulo has been heading that effort. This is the investment we are now making again and results are showing in both the gain of share.

J
JoĂŁo Paulo Brotto Ferreira
executive

Yes, that's right. Innovations, important launches, brand support. And that's a result of the SG&A, sales, logistics. We can both invest on the brands and at the same time, expand on our [Indiscernible].

Guilherme, would you like to touch upon royalties?

G
Guilherme Strano Castellan
executive

Yes. Your second question was about royalties. And you also mentioned something else I couldn't understand.

R
Ruben Couto
analyst

No, my question is about royalties only, yes. I'm sorry.

G
Guilherme Strano Castellan
executive

I'm sorry for that misunderstanding. As part of that separation between the 2 companies, we negotiated on an arm's length this agreement to use the intellectual property of the Avon brand for all Latin American countries. Of course, those that are under the management of Joao Paulo's team. So this agreement was negotiated using a percentage of the royalties based on total revenues of Avon in the region. And that percentage, I'm not going to give you further details of the model of that contract. But you can assume that it's a fixed rate if the scenario is business as usual in the coming years. But the results we showed in the release, and I'm thinking you are referring to the rate that is in the report. But let me remind you, this is from August 13 to September 30 because in the past, those amounts were consolidated as an intercompany transaction. That's why we wanted to show that separated amount because LATAM's margin is 250 bps, so strong, but it had a 30 bps impact on top of the impact on intangibles for the company's SG&A, bringing margins further down.

So despite all these impacts, just like Joao said, the bottom-line impact was positive. That's why we have a strong margin expansion despite all these impacts.

Operator

Our next question comes from Danniela from XP.

D
Danniela Eiger
analyst

First, I'd like to -- you mentioned about the dynamics and the market share. Perhaps we will be feeling with the channel checks. And of course, some of the impacted ones participating with Boticario, but this direct sales at Boticario is not doing so well, perhaps not only because of impact, of course, the rupture or sound products. I would like to understand this impact of this franchise. Can you just give us an idea, shed some light about this impact, perhaps through the feedback from the consulting companies, perhaps with the investment in innovation, which is something that was true in the past. There was a gap, and of course, offsetting the situation, of course, to become more attractive to the ramps. Perhaps if you could tell us, is there any favoring in the merit of this strategy with Avon? Perhaps this might be a favorable for a positive dynamic considering what we have ahead of us.

With regards to the second question, with regards to the gap of 20 percentage points, 20% as a gap, what do you think that it is a structural gap perhaps at the end when you finalize the entire adjustment in both brands? Just for us to see what we could think of a margin gain just for the future.

Now if you don't mind, I'd like to stretch my question and ask you, how can you think about the capital dynamics and capital -- structure of capital, principally, in terms of dividends after the end of the Chapter 11? So in the event we will catch up. So basically, I asked a couple of questions, but thank you very much for this room for my questions.

J
JoĂŁo Paulo Brotto Ferreira
executive

As a matter of fact, I cannot say any word about the competition. What I can tell you, Danny, is about our operation along with our reps. As a matter of fact, and fortunately, to our rejoice, we are witnessing the most -- the highest levels of satisfaction of our reps throughout our entire history. And of course, this is in the wake of the improvement of our logistics. Even if you compare just 1 year ago, when we started implementing the total different scenario, it was very bad and all the problems were just they had an end and the reps are completely satisfied. And there is a lot of dynamic in the trade receiving support, training, capacitation, capacity building and the quality of our training, the quality of our capacity building is well-accepted and fantastic. And that gives us this push to keep investing either in the tools that they use, digitalizing their work and of course, the rhythm of launching novelties and increasing our sales force.

I think this is very useful. When you refer to profitability, as a matter of fact, a couple of slides ago, I mentioned that we try to have good margins, contribution margins. Every brand has a different dynamic with regards to price, different dynamics in terms of new promotions. And of course, categories have different margins, slightly different. But perhaps this tells you the types of investment that we make, of course, in services, training, courses to increase our sales force. And of course, we want to, in the end, have similar margins. And this is basically the dynamic that we might be seeing.

Now I'd like to pass it to [ Gui ] to talk about the capital structure.

G
Guilherme Strano Castellan
executive

Thank you very much, Joao. Now what you just mentioned, of course, there are several things that I know that you know quite well. Those can cause a very significant impact, principally in those quarters with the working capital that it is not so positive, but now this is changing completely in this third quarter. So based on that, this capital dynamic is impacted by receivables, investments in receivables. And of course, since the first quarter this year, those planned investments are actually producing positive results to the company. And I may say there is the stock also. And that dynamic is also affecting the results, and we want to aggressively decrease our percentage -- our working capital based on the revenues. Of course, this will be driven by receivables -- payables rather, and the use of stock and a very aggressive logistic approach with new ideas from Joao and of course, we're going to be seeing the fruit in the second this quarter of 2025. Of course, we are not showing such a detailed plan per city, per channel per category. Of course, we are very strong in terms of optimizing our working capital in the next few years. So there is a lot of room principally in those 2 aspects that I just mentioned with the stock and also with payables.

Now with regards to the use of capital, you are absolutely right. We are in the middle of a changing time. So in the eyes of the market, I understand, and give us a time. So we have in this process with our API, our Chapter 11. So there are potential outcomes soon. We are not looking at paying dividends by no chance until the end of the cycle. Of course, the only thing that we wanted to disclose here during our release is this is a non-cash loss due to our Avon de-consolidation. And eventually, we might be offset all that with our capital reserves, of course, considering the [Indiscernible] apologizes. And with this action, we would have the ability of pay off the dividends, but we are not showing by no chance that we would pay those debt in the short run.

D
Danniela Eiger
analyst

Excellent. Very clear. And congratulations for the good results.

Operator

The next question comes from Joao Soares from Citi.

J
Joao Pedro Soares
analyst

Congratulations on the results. I have 2 questions. The first to Joao, I would like to understand this short-term issue, because in the past, we had some issues with systems integration. There were some disruptions, challenging process naturally. Based on your tone, we have the impression that the process is a lot smoother now for both Natura and Avon. And we can only assume that fourth quarter numbers would be better because of the challenges you had last year and stronger market share up until now. So how would that dynamics play out in Q4?

And when we talk about gross margins, this has been very robust at 67% in LATAM. So my question is how sustainable would that be, especially as you capture additional efficiencies from the integration. Can we expect higher gross margins sustainably? That's my question actually.

J
JoĂŁo Paulo Brotto Ferreira
executive

Well, I wouldn't like to give you a lot of information about the short term. But you're right, in Q4 of last year, we had many, or a lot of operational noises, logistics integration, lack of products because the integration had started in September. So Q4 was filled with operational difficulties, which in the end hurt the potential of that quarter. Today, things are completely different. Your interpretation is correct. Implementation has been very healthy at a very good pace. So I think your analysis makes sense.

As to gross margins, we believe the average gross margin in Latin America is very healthy. And yes, there are operations yet to be integrated, and we know that favors mix optimization in our portfolio, promotional investments, which will help us. On the other hand, we have to remain competitive when compared to the competition in these different markets, which, to a certain extent, limits our capacity to transfer prices. There may be marginal opportunities down the road. However, we believe that the current margin level is very healthy.

Operator

The question Irma from Goldman Sachs.

I
Irma Sgarz
analyst

Two very quick ones. With regards to the break between volume and price, it was very strong. I would like to obtain more details not in terms of productivity from the reps, of course, but talking about prices and volume. So there is more volume than price. I would like to confirm that.

And the second part of the question, the official shop on the web through Mercado Libre this past month. I would like you to talk a little bit about the strategies, what you have in mind? Is this a very important plan to really reach and increase this sales channel? Perhaps this is for you to reach new clients where you don't have so much penetration. And how much you are going to be using in terms of -- using this channel?

J
JoĂŁo Paulo Brotto Ferreira
executive

Now with regards to Natura Brazil, the increase in our revenue is for both volume and price. I would say, half and half, roughly speaking. It's not exact -- in exact figures, but basically, it is half and half. With regards to Mercado Libre, of course, we want to be part in the life of our reps with different purchasing experiences. So that's why we want to diversify our channels. The online market in Latin America is actually the Mercado Libre. So it seems to us quite a positive strategy to be able to be part in this market dynamics. Our proprietary markets are still our priority, but there's no shade of the doubt that part of our clients will go and look for our products in other instances. So this is a strategic movement, but it is nothing near our main desire to change it certainly.

I
Irma Sgarz
analyst

So perhaps you could tell us about how you want to deal with that because you have an official Internet sale and also the reps on the other side that have their lists and also their little shops on the web through Mercado Libre. So what do you think you're going to do? And how are you going to jiggle with those different variables?

J
JoĂŁo Paulo Brotto Ferreira
executive

Well, actually, our reps are our major assets. So we don't want to hinder their business by no chance. So what happens is that when we have our physical shops, we had to learn to deal with their own small corner shops and direct sales and understanding the price dynamics and the promotions that are run with all the clients so that we can still serve and deliver to our clientele. So we are aware of the dynamics of -- and the approaches of our reps in the Internet markets, and we talk directly with them for them to understand what our policies once we start using this format. And I'm absolutely sure and aware that we're going to have a very helpful and balanced space with them.

G
Guilherme Strano Castellan
executive

I would like to add something that in our release. You saw the retail and the digital gains 3 percentage points on the Natura Basket. At the same time, as Joao said, our reps have a very high engagement and satisfaction. So all-time high. So you can see that despite of this exposure in the channel, of course, as Joao said, that might be a great asset that we have, principally with our reps as well.

Operator

Juan Jose Guzman from Scotiabank is up next. Can you hear me, Juan? I've just sent the button so that you can unmute your mic. Are you there, Juan? Well, let's move on to the next question. Gustavo Fratini of Bank of America.

G
Gustavo Fratini
analyst

I have 2. How can cross-selling between Natura and Avon improve once you've implemented the combined order and the savings in logistics?

My second question has several outcomes. The API Chapter 11 recovery. If the final decision in December postpones the entire process, what's your take on keep on funding the international operations so that I can have an idea of what the marginal disbursements would be and whether you would need additional cash after Q3 of '24?

J
JoĂŁo Paulo Brotto Ferreira
executive

I can only say that cross-selling is up after we introduce the combined checkout. We're still in the learning process as to encouragements or incentives to increase even further that cross-sell. And of course, logistics costs are coming down as expected, I cannot provide any further information about it.

Over to you, Guilherme.

G
Guilherme Strano Castellan
executive

Thank you for your question, Gustavo. I think you raised a very interesting question. We are in that process and its timeline has already been agreed upon. And of course, we're working based on that given timeline. And I'll be as honest as possible because the market can even speculate different outcomes, but we don't see any material evidence that would significantly change that timeline. We believe that approved timeline is only fair based on the secondary hearing. And that's what we have been working with. What can happen next? I think we were very clear during the presentation. We have one approved up until January. And we're not speculating here what potential outcomes there may be. But these cash adjustments that would impact net debt, of course, were high in Q3. However, we don't expect that to happen in Q4 because both November and December are strong cash generation companies for Avon assets abroad. And of course, ever since 2022, our mindset has been very cash skin with very cautious cash protection on our side. And we have to take that into account just as well.

Operator

Now we wrap up our Q&A session.

I would like to pass it now to Barbosa.

F
Fabio Barbosa
executive

As a matter of fact, we are available. So if there is any question, please get in touch with us. Thank you very much for your attention, and have a good day.

Operator

This video conference with regards to the earnings [Indiscernible] is now closed. So thank you very much for your participation. We are all available. Please get in touch if you have any questions.

Have you all a good day. Thank you.